What is a Pourover Will?

Over the last few blog posts, we have discussed the definitions of both a last will and a living trust, however, there is another type of will (formed with a living trust) that is important to define: a pourover will.

A pourover will is a will used in connection with a trust. A pourover will is like any other will, except that the primary beneficiary is your living trust. The pourover will transfers assets left out of your trust back into your trust to ensure these assets will be subject to your trust’s distribution plan. This kind of will “pours” or transfers any property left out of your trust back into your trust. When forming a trust, it is also important to consider forming a complete estate plan. A will is one element of this plan, and over the next few weeks, we’ll be discussing two other important documents involved: a durable power of attorney and advance health care directive.

Benefits of a Pourover Will

Here are a few additional benefits to making a pourover will a part of your estate plan:

• It distributes your tangible personal property, such as cars, furniture, jewelry, artwork, etc., to your beneficiaries who are not already beneficiaries of your trust;
• It nominates a guardian for your minor children or pets;
• It revokes prior wills;
• It can include other provisions that may protect your estate plan if challenged.

A question I am often asked is whether or not a pourover will goes through probate. Whether a pourover will goes through probate will depend on the value of the assets that are subject to the pourover will. These assets are considered “in the pourover will” if they have not been properly transferred to the trust or set up for beneficiary designation. If assets subject to your pourover will are valued at more than $184,500.00, probate will likely be required in the state of California. If the total amount does not exceed $184,500.00, these assets can likely be transferred to the trust without probate pursuant to the California Probate Code.

If an individual dies with a living trust, but without a pourover will, it can lead to two different distribution plans; one for the assets in the trust, and another for the assets not in the trust that may be required to go through probate. In some cases, the two distribution plans might be alike because the beneficiaries of your trust are the same people who will inherit outside your trust. However, if the beneficiaries are not the same, the assets could be distributed to different beneficiaries. For example, if the trust left all assets to a charitable organization, and the decedent did not have a pourover will, any assets not in the trust would not go to the charity, but instead would be distributed to the testator’s relatives under California Law. It is important to have a pourover will to avoid this situation. Whenever a living trust is used, it is essential to also have a pourover will prepared with the trust to properly transfer your property which was not held by the trust when you pass away.